Consider commercial real estate trends and changing demographics together

By: Jeff Fecteau

Commercial real estate industry observers are closely watching a handful of trends, including risk retention/ “skin in the game” requirements, rising interest rates, potential changes to Dodd-Frank under the new U.S. administration, and the continued emergence of non-bank lenders. In addition, ever-changing demographics and lifestyle preferences continue to influence growth. It’s important to look at all of these factors together to determine their effect on your bottom line.

Deloitte’s 2017 Commercial Real Estate Outlook states that continued volatility in the global markets has led to rates remaining low. However, rates are expected to rise in 2017. This will increase mortgage costs and could deter real estate investment. Deloitte’s Outlook cites the new risk retention rules as a key factor in the decline of the issuance of commercial mortgage-backed securities. In addition, Forbes notes that non-bank lenders are filling in where banks are no longer funding.

While the changes that the new U.S. administration will make are not yet known most experts believe it’s unlikely Dodd-Frank will be completely repealed.  The more likely outcome appears that its effect could be reduced while not completely relaxing all the requirements. The consensus being a complete repeal may lead to looser lending practices and possibly to another financial crisis.

At SS&C, we have experienced accounting and financial reporting professionals that are dedicated solely to the real estate market. Our solutions include technology that supports your operational needs and comprehensive services tailored to the unique needs of organizations that invest directly in mortgage loans or through securitizations. Whether you are buying MBS or investing directly in the mortgage loans, we have the right solution for you.

To learn how SS&C can help you navigate new commercial real estate trends and increase your bottom line, contact Jeff Fecteau at 860-731-5022.

Links to source material
http://www.forbes.com/sites/elyrazin/2016/12/22/5-commercial-real-estate-trends-to-watch-in-2017/#2458a71ca0fd
https://www.bloomberg.com/news/articles/2016-11-10/wall-street-hopes-trump-will-make-structured-finance-great-again
https://www2.deloitte.com/us/en/pages/real-estate/articles/commercial-real-estate-industry-outlook.html